OREANDA-NEWS. March 11, 2009. The Republic of Latvia and Oy Metsa-Botnia AB (the 2nd largest pulp producer in Europe) being a share holder of JSC Baltic Pulp have concluded an agreement on the termination of company’s activities. According to this agreement the liquidation process of JSC Baltic Pulp is initiated according to the Law on Commerce, reported the Official website www.mk.gov.lv.

The State Chancellery represented the State in these negotiations with the current and former shareholders on the termination of company’s activities The key task of the State Chancellery was to receive confirmation from the current shareholder (Oy Metsa-Botnia AB) and the former shareholders (Sodra cell AB, Sweden and Oy Metsaliitto International Ltd., Finland) that they have no claims against the Republic of Latvia concerning non-performance of the JSC Baltic Pulp project amounting to EUR 900 000 000. The respective confirmations were received from Oy Metsa-Botnia AB, Finland, Sodra cell AB, Sweden, and Oy Metsaliitto International Ltd., Finland.

Elite Dreimane, Deputy Director for Legal Acts’ Affairs says: „During intense negotiations the State Chancellery ensured protection of the national interests to a maximum extent and no additional burdens are threatening the state budget in relation to Baltic Pulp”.

JSC Baltic Pulp was founded in 2000 as a joint venture of Latvia, Finland and Sweden, and its main targets were construction of a pulp plant and a production volume of about 600 000 tonnes a year. Currently, company’s shareholders are the Republic of Latvia (33%) and Oy Metsa-Botnia AB (67%). Due to the latest developments the shareholders came to a conclusion that the implementation of the Baltic Pulp project is unfeasable.

The liquidation costs shall be covered jointly by each shareholder proportionally to the amount of shares owned by them. The total anticipated costs are about LVL 210 000, thus, Latvia’s expenditures will amount to approx. LVL 69 000.